AccelerAid to take over North American marets

Transcription

1 University School of Business AccelerAid to take over North American marets Presentation to the board of PromenAid Casimir Kontio Kimi Paivarinta Nicky Tuominen Valtteri Viitala

2 Recommended solution: AccelerAid Key capabilities Challenges Solution Easy to install Compliant code Power grip Anonized aluminum product? Marketing channels Financing Differentiation & positioning Business model How to capture and finance the substantial growth potential? Partner up with Lowe to achieve material growth in North America focusing on e-commerce, and relocate the manufacturing to China

3 Presentation timeline 1 Analysis Valtteri, Kimi 2 Alternatives Casimir 3 4 Implementation Financials Nicky, Valtteri Kimi 5 Risk mitigation Casimir 6 Conclusion Valtteri

4 Analysis Valtteri, Kimi

5 SWOT analysis Product itself is the key capability Easy to install Compliant code Power grip Anonized aluminum product S Financials and information of product comprise key internal challenges Cash flow management Unclear differentiation of product W

6 SWOT analysis Niche target market and megatrends are key opportunities Key challenges Niche market position Ageing population O Rather easy to imitate Negative image of handrails T

7 PromenAid: Benefit ladder Emotional benefit Consumer benefit Product benefit Brand attribute Ensures that you and your loved-ones are in a safe environment Brings safety to your home Offers a safe passage on stairs and ramps with minimum effort Self-installable, functional aluminum design, strong handrail

8 Identifying customers: meet Franck who is need for handrail Franck, 75 yrs old Weakened mobility Multiple floors in his home need for handrails

9 Identifying customers: meet Franck who is need for handrail End user Customer Franck, 75 yrs old Weakened mobility Multiple floors in his home need for handrails Marie, 46 yrs old Daughter of Franck Wants to take care of his dad and ensure his mobility Mid-class income E-shopping $$$

10 Identifying customers: meet Elizabeth, a kid who likes to play Elizabeth, 3 yrs old Plays a lot in their mutli-floor apartment Mom is worried about safety

11 Identifying customers: meet Elizabeth, a kid who likes to play End user Customer Elizabeth, 3 yrs old Plays a lot in their multi-floor apartment Mom is worried about safety Marie, 46 yrs old Mom to Elizabeth Mid-class income E-shopping $$$

12 $'000 Analysis PromenAid growth and status at the moment Sales mix between US and Canada Revenue growth in recent years % % US Canada Sales between Brick & Mortar and E-Commerce 50 0 FY14A FY15A FY16A 45% 55% Brick and mortar E-Commerce

13 Competitive field in handrails High Safety Stair lift Increase immobility Different Market Metal Time consuming to fabricate and install Specially trained installers $40 to $80 per foot Hybrid PromenA id Code Compliant Easy to install Flexible $20 to $60 per foot Wood Pinch Grip Design $30 to $60 per foot No angle changes Horizontal frame member required $30 to $50 per foot Low Low Ease of Install High

14 Alternatives Casimir

15 Screening approach Ensure product quality Gain access to wide distribution network Ensure adequate financing Keep control over the business

16 Screening approach Partner up with Lowe and shift manufacturing to China License to hybrid competitor Sell 1/3 of the business to large retailer Ensure product quality Access to wide distribution network Ensure adequate financing Keep control over the business

17 Screening approach Partner up with Lowe and shift manufacturing to China License to hybrid competitor Sell 1/3 of the business to large retailer Ensure product quality Access to wide distribution network Ensure adequate financing Keep control over the business Partnering up with Lowe has the best strategic fit for PromenAid

18 Recommendation: partner up with Lowe Utilise Lowe s e-channels to get access to ready-made distribution network to increase the knowledge of PromenAid s products, while still keeping control over the business

19 Implementation Nicky, Valtteri

20 Suggested implementation plan and schedule Key steps 0m 3m 6m 9m 12m 2 years 3 years Manufacturing Partner in China Manufacturing in China Marketing Develop e-platform Launch wide marketing campaigns Partner with Lowe Distribution Sell via own e-channels Utilise Lowe s e-channels Cash flow mgmt Payment terms with Lowe

21 We suggest the manufacturing to be moved to China Negotiate new aluminum manufacturing partnership in China Gradually change the emphasis on manufacturing to China Hire quality control employee to ensure quality standards Gain lower cost structure through moving manufacturing to China

22 Marketing strategy Product Position the product to two niche markets: seniors and families with kids

23 Marketing strategy Product Price Position the product to two niche markets: seniors and families with kids Low-cost strategy Affordable compared to competitors

24 Marketing strategy Product Price Position the product to two niche markets: seniors and families with kids Low-cost strategy Affordable compared to competitors Place Handrails via e-commerce channels Medical equipment via brick and mortar

25 Marketing strategy Product Price Position the product to two niche markets: seniors and families with kids Low-cost strategy Affordable compared to competitors Place Handrails via e-commerce channels Medical equipment via brick and mortar Promotion SEO Lobby through occupational therapists Educational videos on social media and TV

26 We suggest a distribution partnership with Lowe Negotiate a deal with Lowe to utilize their e-commerce channels by paying 10% fee/order Get access to wider network in order to enable growth Maintain brick and mortar deals to ensure visibility Improve own website to increase sales growth Wide distribution network in North America; 2/3 of sales from e-commerce

27 Increase flexibility in cash flow management Hire new talent to optimize inventory mgmt less capital employed Negotiate a royalty agreement based on sales with Lowe prolong accounts payables Utilize factoring agreements with financial institutions to get revenues earlier Negotiate with bank to extend credit line Get flexibility to cash flow management

28 Financials Kimi

29 $'000 Analysis Proposed forecast of the revenue growth 18,000 45% 16,000 15,730 35% Use of proceeds 14,000 12,000 20% 26% 25% $'000 FY17E Product Development ,000 8,000 8% 8,328 15% 5% Sales and Marketing 589 Advertising and Promotion 248 6,000 Selling costs 341 4,000 3,777-5% Repayment of Existing Debt 134 2, ,240-21% FY17E FY18E FY19E FY20E -15% -25% Contigences 248 Total Proceeds 1,200 Revenues Net income-%

30 $'000 Analysis AccelerAided growth outlook 18,000 45% 16,000 15,730 35% Financial Projections 14,000 12,000 20% 29% 25% 15% $'000 FY17E FY18E FY19E FY20E Revenues 1,240 3,777 8,328 15,730 COGS (372) (982) (1,999) (3,146) 10,000 8,000 3% 8,328 5% Marketing costs (248) (500) (800) (1,100) Addittional costs (107) (81) (151) (280) 6,000 4,000 3,777-5% -15% Lowe's Roaylties (22) (66) (146) (275) Start of China Manufacturing (50) (10) 0 0 E-Commerce Platform (35) (5) (5) (5) 2, ,240-29% FY17E FY18E FY19E FY20E -25% -35% Net income (361) 119 1,700 4,500 Net income-% -29% 3% 20% 29% Revenues Net income-%

31 Risk mitigation Casimir

32 Key risks and actions to mitigate them Identified risk Magnitude Actions to mitigate Failure to partner with Lowe Mid Search for other partners Provide decent royalty fees for Lowe (10% expected to be right rate) Compiled inventory Mid/high Utilise multi-channel distribution tactics Unsuccessful communication of product benefits Mid Focus on clear communication of value proposition and customer benefits in wide marketing campaigns

33 Conclusion Valtteri

34 Recommended solution: AccelerAid Key capabilities Challenges Solution Easy to install Quick delivery Compliant code Power grip Financing Marketing channels Differentiation & positioning Business model How to capture and finance the substantial growth potential? Partner up with Lowe to achieve material growth in North America focusing on e-commerce, and relocate the manufacturing to China